MELISSA HEAGNEY SENIOR JOURNALIST
Geelong’s house prices have recorded their slowest rate of annual growth since 2015, with new data revealing the median price fell by 4.4 per cent in the June 2019 quarter alone.
Data from Domain’s June House Price Report, released last Thursday, showed house prices in the major regional city fell to a median of $545,000 during the June quarter this year, the first time there’s been a quarterly drop in over a year. The last time house prices fell in Geelong was the June quarter 2018, when they dropped by one per cent.
Moreover though, it’s the first time Geelong’s median house price hasn’t grown annually in four years. Domain economist Trent Wiltshire said it was a clear sign that the boom times were over.
“It’s a big slowdown. The Geelong boom is well and truly over. After years of growth, it’s finally slowing down,” he said.
In good news for unit owners, median prices for apartments and townhouses bounced back from last year, rising by 5.4 per cent in June to a median of $395,000. Like houses, median prices for units had dropped in the June quarter last year by 2.4 per cent.
Experts say the price falls are part of a delayed downturn, with Geelong’s market 12 months behind Melbourne’s house price trends.
Agents and property experts say a lack of stock at the higher end of the market is affecting overall prices, while Geelong’s higher median house prices are having an impact on the attractiveness of the region for some buyers.
Mr Wiltshire said the falls were part of the overall downturn which had first affected Melbourne.
Median house price growth in Geelong peaked in March 2018, nine months after Melbourne’s reported peak in price growth. Suburbs across the region experienced a 16 per cent rise compared to March 2017.
“The relative affordability declined in 2018 as Geelong house prices peaked,” Mr Wiltshire said.
The median price for a home across the Victorian capital’s suburbs is now $818,237.
“The typical Melbourne house is now 50 per cent more expensive than a typical Geelong house, whereas in 2016 the typical Melbourne house was 70 to 80 per cent more expensive,” Mr Wiltshire said.
“I think what you’ll find about the house prices is that it’s a direct result of the lack of quality stock going to market,” he said. “Volumes are down by no less than 40 per cent.”
He also said people had been sitting on their hands waiting for the outcome of the May federal election, and whether negative gearing tax breaks would continue.
They were also waiting to see what effect interest rate cuts and looser lending criteria would have on the local market, Mr Falconer said.
Mr Falconer said unit prices had remained up as people looked to invest in apartments and townhouses, including those withdrawing superannuation to do so after the results of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Findings of the royal commission saw superannuation funds come into sharp focus over advice fee deductions and unsolicited sales tactics.
The slowing market also affected the Bellarine Peninsula, considered part of Geelong in the Domain data, with beachside areas including Queenscliff and Point Lonsdale seeing sales slow after a rush in the summer months.
He said tighter lending criteria had a negative effect, particularly in areas where houses were priced around $700,000 in parts of Ocean Grove.
However, he said July had seen a number of huge sales, including some records prices paid.
“It’s definitely picked up,” he said.
Though the owners would not disclose the price, a home which sold at 8 The Esplanade, Queenscliff on July 8 was said to have set a record for the suburb. It was a multi-million dollar sale, Mr Grainger said.
Melbourne buyers had been boosting unit sales in the area with downsizers snapping up townhouses along the Bellarine.
“A lot of retirees from Melbourne are buying 30 to 40-square-metre townhouses with a backyard,” Mr Grainger said.
“You can buy one for between $900,000 to $1.3 million without a view, north of that for one with a sea view.”
While townhouses were popular, off-the-plan apartment sales had slowed in Geelong and along the Bellarine, he said.
He was hopeful the market would come back over the warmer spring months.
Mr Wiltshire predicted prices could drop a little over the next 12 months, following Melbourne’s property market trends.